10,000 crore a year loss for railways | Fusion - WeRIndia

The railways will end up saving Rs 10,000 crore annually if the railway board stops all centralized procurement, says a report by ‘Metro man’ E Sreedharan.

In his final report on ‘delegating tendering and commercial powers to general managers and other operating levels’ of railways, Sreedharan showed that by unifying procurement powers, the railway board has managed to gain a lot of cash within the hands of few, and vastly increased rent-seeking power that encourages corruption.

“Procurement is through cartel only, list of approved sources and cartels are synonymous … there is no item in which there is no cartel. Committee feels that vendors thus continue to fleece at will,” Sreedharan says.

The report stated that the committee has observed the current practices and procedures followed at the board and has reached to a conclusion that improving and decentralizing the system with empowerment and accountability shall affect annual economy to the tune of rupees five thousand crore in stores procurement and equal amount in works contracts.

The final report of the committee has been submitted on March 15. The report recommended the railways to not take any commercial decision and stated that even procurement for its own needs should be done by the northern railways.

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